A Magazine about the Hudson Valley’s local economy, published by Hudson Valley Current.

Eight Forms of Capital: Material Capital

Material capital can be thought of as non-living physical objects. Raw and processed resources like stone, metal, timber, and fossil fuels are “complexed” with each other to create more sophisticated materials or structures. Modern buildings, bridges, and other pieces of infrastructure along with tools, computers, and other technologies are complex forms of material capital. The form of currency associated with material capital would be any type of natural resource, complexing into buildings, infrastructures, and tools. 

Along with the other various alternative forms of capital discussed in earlier issues, material capital helps us to understand sustainability in terms of the economic concept of wealth creation or “capital”. Any organization that uses alternative forms of capital to deliver its products or services will benefit the local economy. A sustainable organization should maintain and enhance these stocks of material capital assets, rather than deplete or degrade them. We are facing a sustainability crisis because we’re consuming our stocks of natural, human, and social capital faster than they are being produced. By maintaining and trying to increase assets of material capital assets, we can live off the income without reducing the capital itself. 

Material capital can be considered one of the primary factors of production, and it would be impossible to run a business without materials. They are durable, long lasting, and piece together the complex structures that we use to navigate to and work from. It allows us to complete our daily tasks while contributing to the local community. A good example of efficient material capital would be a shared, communal workspace where business owners can rent out and use the space as needed. When people and the businesses, organizations, and governments understand the alternative forms of capital, they may see the usefulness of material capital and find that financial capital is not the whole system.